July 31 - Europe's EADS confirms plans to reorganize in three divisions and change its name to Airbus, adopting the look and feel of its arch-rival Boeing in a bid to become more competitive. Joel Flynn looks at the reasons behind the change and whether it will make a difference to any future plans for deals like the failed tie-up with BAE Systems.
When you're fighting for a $100 billion dollar annual market, your brand is everything. That's why Europe's EADS has changed its name. It'll now be called Airbus Group, after its core planemaking subsidiary. Tom Enders is president of EADS. SOUNDBITE: EADS President Tom Enders, saying (English): "Airbus is two thirds of our revenues, Airbus is the most internationally known brand, known on the whole of the globe, whereas EADS was never quite a household name beyond the European nations." The idea is to move away from a multi-national structure in favour of what it calls "normal" governance. To make future deals easier and boost competitiveness Airbus Group will have three divisions. Defence and space activities will be combined with military transports. And its Eurocopter business, the biggest commercial helicopter maker in the world, will be called Airbus Helicopters. Passenger jets will remain separate. That's the part that's helped EADS second quarter operating profit rise by 23% and that's where their focus now lies. The sensitivity of defence operations is partly why an attempt to merge with BAE Systems failed last year. Enders stressed there were no plans to revive it. SOUNDBITE: EADS President Tom Enders, saying (English): "The defence business is going down. It's shrinking in Europe. Our forecast is that at least for the rest of the decade we will stay in a flat or shrinking business situation where no new big aeronautic projects on the horizon so obviously we need to take costs out." EADS shares have risen almost 50 percent since January. And the new Airbus Group now hopes to regain the top spot for orders and deliveries from its arch-rival Boeing.